‘Super Bowl’ of health care has questions about Trump and drug prices, but no answers

Executives own up to uncertainties, but don’t agree on single solution

Bloomberg News/Landov

Vice President Joe Biden speaks to the J.P. Morgan Healthcare Conference in San Francisco on Monday. He is one of several Obama administration veterans to speak at the conference, but most questions center on the incoming president, Donald Trump.

At the largest heath care industry conference of the year, tremendous uncertainty underlies the frenetic schedule of meetings and deal-making, but nobody expects immediate answers on the big questions facing them all.

Top health care executives, investors and Wall Street analysts have descended on San Francisco for the J.P. Morgan Healthcare Conference, just two weeks before President-elect Donald Trump’s inauguration. Changes Trump has signaled could have big implications for the $3.2 trillion industry, especially a long-promised repeal of the Affordable Care Act.

What specifically could change for health care under President Trump? The main sentiment around the gilded rooms and hallways of the conference’s center, the Westin St. Francis, is a simple one: “I don’t know.”

It’s a question the conference doesn’t attempt to answer either, with no Trump administration speakers and the bulk of headliners sourced from the outgoing Obama administration.

“I’m sure there are going to be ramifications, but no one can figure out what these things are,” Enanta Pharmaceuticals Inc.
ENTA, +1.77%
Chief Executive Jay Luly said.

Despite the uncertainty, for investors, it’s “back to business as usual” after a down year at last year’s conference, said Paul Yook, co-portfolio manager of Bioshares, which oversees biotech ETFs BBC
BBC, +0.88%
and BBP
BBP, +0.14%
.

“Last year, it was death, it was a morgue,” he said. “What we don’t have is the over-exuberance of the other year, ‘CAR-T is going to save everybody, everywhere,’” he added, referring to a much-hyped type of cancer therapy.

Drug company executives say ACA discussions will likely take up most of lawmakers’ bandwidth. While they don’t expect pricing regulation from Trump, they’re wary of becoming a presidential target.

Public polls show the cost of drugs is still very much a consumer concern. It could well prove a populist stake for the president-elect, pharmaceutical executives said Tuesday.

Companies that are “tone deaf” in this environment could pay a high price, Allergan PLC
AGN, -0.80%
CEO Brent Saunders said at a Tuesday panel organized by biotech news site Endpoints News.

“If you think for a second that our president-elect, soon to be president, isn’t going to use 140 characters and tweet viciously about it, I don’t think you know who is going to be president,” Saunders said.

Drugmakers once attributed high drug prices to the actions of a few “bad actors.” The term is still in use, but big pharmaceutical companies have recently begun new drug pricing initiatives to set themselves apart from those “bad actors.”

Pops and other executives said that value-based payment—the idea that prices in health care should be based on patient outcomes—could be important in changing drugmakers’ public perception. Value-based payment has been pushed under a Centers for Medicare and Medicaid Services center created by the ACA, and it’s unclear how it would fare under the next administration.

Pharmaceutical executives spoke positively about value-based payment, however, with Saunders calling it “the future” and “a good thing.”

“What animates everybody is this idea of saving lives,” Pops said. “That’s why we do it. We should be able to do this at a price and value people recognize as valid.”

The SPDR S&P Pharmaceuticals exchange-traded fund
XPH, -0.12%
has fallen 9.2% in the last 12 months, while the S&P 500
SPX, -0.55%
has gained about 18%.

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